90 seconds at 9 am: NZ TWI record

90 seconds at 9 am: US jobs growth slows; China and Aust to trade currencies directly; China presses for better investment access; NZ TWI hits record; NZ$1 = US$0.843, TWI = 77.7

8th Apr 13, 8:39am by David Chaston

Here's my summary of the key news overnight in 90 seconds at 9 am, including news its all about currencies again today.

The kiwi dollar ended last week at an all-time high on the TWI at 77.68 as the Japanese yen fell sharply and dragged the Aussie dollar down too.

That came after US non-farm payrolls grew in March by a level below every expert's estimate. The surprise knocked New York equity markets and the US dollar, raising the Kiwi to a seven week high against the greenback.

At the same time, markets are absorbing just how massive the Japanese reflation plan is - basically doubling their money supply in two years. The yen continued to weaken, ending the week at 82.25 yen to the NZ dollar, a level it has not been at since June 2008, almost five years ago.

Realignments in exchange rates were on the mind of international leaders meeting in China. Australia and China are reported to be about to seal a deal where there is direct trade between the Chinese yuan and the Aussie dollar.

Meanwhile, China is pressing Australia to relax restrictions on access allowed to its huge sovereign wealth fund for big strategic projects in the country, something that would reinforce the Aussie dependence on China. China is making the same arguments with the US, but with less chance of success it seems.

In Europe, the focus has shifted to Portugal where a court decision has undermined the undertakings their government has given to the ECB, EU and IMF to get bailout funds. They are in a difficult position, and are considering paying government workers in Portuguese Treasury bills rather than cash.

The Kiwi dollar starts the week at 84.3 USc, 81.2 AUc, 82.25 Japanese yen, and our TWI is at a record post-float high of 77.7.

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7 Comments

by Gummy Bear Hero | 8th Apr 13, 9:48am 1365371300

Good morning from Australia , to all youse Kiwis wot still live in the shakey isles ( Wolly / Count / Bernard / PDK ... 1,2,3 ....all 4 of youse ! ) ...... in case you mist it , Julia Gillard has launched a raid on the compulsory super fund industry

.... the $A 1.5 trillion pot has proven too rich an allure , for her not to target it in an attempt to fund her election bribes ( cutting government spending , or not promising so much pork to the voters is not an option , apparantly ) .....she's spun the lie that only 16000 " rich " Australian will be affected , imposing a 15 % tax on fund earning above $A 100 000 in any given year .... the lie being that on a 5 % return you'd have to have $A 2 million accumulated to reach the tax zone .......

NOOOOOOOOOOOOOOOOOOOO !!!!!! ..... ......

as we all know , there's rarely an average year in the markets , super fund returns can be volatile , from 25 or 30 % down , to the same or more up , depending upon your asset class allocations ... and thus , a smaller $A 500 000 investment with a 30 % gain , would be liable to a chunk of tax , even if the fund is still in the accumulation stage ...... If Australian government's can do this brazen raid upon citizen's money , what's to stop Kiwisaver funds similarly being raided by future NZ governments !

by iconoclast | 8th Apr 13, 10:41am 1365374490

Three things for you to chew on GBH

(a) The 15% tax applies only to earnings by the super fund, not appreciation in valuations of shares and property, so most of the 16000 will be safe

(b) suspect that anyone with cash holdings earning interest and shares paying dividends that dont receive tax imputation will soon move them elsewhere

The Labor Party has a real problem in the think department

and I'm surprised the Labor Party didnt go for the jugular instead and restrict the pay-in tax deduction on contributions to funds that invest in-country. Nearly 40% of the $1.5 trillion is invested off-shore creating jobs in overseas countries

by Gummy Bear Hero | 8th Apr 13, 10:49am 1365374976

I suspect that Julia & Wayne wanted to go harder at the super fund pot , but agitation by the fund industry and financial scribes stayed their thieving fingers from doing so ....

..... nevertheless , they have sowed the seeds of doubt in investors minds ( as per the MRRT ) , for what ultimately will be little " gain " to the government ...

The accountants and tax planners of Australia are erecting statues of Gillard & Swan in gold .... Yipppppeeeeeee !!!!

by Christov | 8th Apr 13, 10:47am 1365374855

Good Morning to you GBH....i do hope the sun is shining on your fair city, we have been basking in it on the forgotten rock.......good to see you around albeit as the messenger of ill tidings...

In the words of Good King Richard...".Bring me some other news , I like not this news. "

by Gummy Bear Hero | 8th Apr 13, 10:52am 1365375144

Hullo Count : Hope all is well with you ..... sunny 24'c here !

..... but for my ill tidings , as if we need to be told , don't trust the government !

Super !!!.... ( gotta run , we're poaching this morning , in the TAFE kitchen .... pip pip ! )

by Christov | 8th Apr 13, 10:59am 1365375546

Ahhhh...relief but a read away it was....On a brighter note , John Key met with Xi Jinping and discussed among other things the whereabouts of Russel's flag.......how many more financial refugees they'd like us to take...and how New Zealanders are coming along assimilating to Chinese Socialist Culture.

Swell..!

by Christov | 8th Apr 13, 11:28am 1365377296

To China's seeking a relaxation on Aussie restrictions to trade investment David, I think there is other rhetoric going on behind the scenes at present, concerning the line in the sand....resulting in Key's gaff, and subsequent backtrack.

Nonetheless it was front of mind when he blurted , so you can bet the questions been asked in no uncertain terms.

Looking down the road , you have to have concerns about the migrant stats, this Government (and previous) have courted......dollas for dopes.